July 29th 2022

PA.199 | Economic Shrinking, Social Capabilities and long-term Economic Development

Parallel Sessions
14:00 - 17:30 - Recherche Sud - Room 0.016
It is increasingly recognized that successful long-term development not only requires capacity for economic growth, but also resilience to economic shrinking (Broadberry and Wallis 2016; Andersson 2018).In the extensive literature on the nature and causes of economic growth in the developing world in the post-war era, the role of economic shrinking has received limited attention. Pritchett (2000) notes that negative growth is a frequent phenomenon in developing countries. Yet the literature is not well equipped to understand it. There is a related literature, however, trying to measure and understand the “episodic” nature of economic growth (e.g. Pritchett et al 2016). Important studies within the realm of this discussion are Easterly et al. (1993) and Rodrik (1999), who highlighted and explained growth “collapse” and “reversals” by the occurrence of economic shocks or social conflict. Research has also advanced on finding ways to empirically capture episodes of different growth dynamics and to associate a number of correlates with either growth spurts or growth stops (Jones and Olken, 2008; Kar et al., 2013). What is missing from the current state-of-the-art is twofold: i) an empirical and long-term analysis of the relative importance of economic shrinking for catching up growth and ii) a theoretical understanding of why some developing countries are more resilient to shrinking than others. Since no production function can explain why economies shrink, the theoretical approach requires new perspectives that go beyond models based on merely accumulation of factors of production or total factor productivity calculations. For this reason, novel analytical approaches are needed that pinpoints the set of capabilities and institutions through which resilience is built. The purpose of the proposed session is to incorporate the role of economic shrinking into the understanding of the process of economic development both historically and in the developing world since the 1950s. The aim is to encourage a discussion that will enable us to understand how the least developed countries throughout history have developed resilience to shrinking. Such knowledge will contribute to our knowledge of how economic development can be sustained in the poorer parts of the world today. The session covers dynamics of development for both the rise of the North and the South (Latin America, Sub-Saharan Africa and Pacific Asia), in a comparative and historical perspective. The call for papers welcomes topics related to the empirics or theory of economic shrinking and/or resilience to it, particularly from scholars at a relatively early stage in their academic career.
E - Macroeconomics and Monetary Economics
E02 - Institutions and the Macroeconomy
O - Economic Development, Innovation, Technological Change, and Growth
O47 - Empirical Studies of Economic Growth • Aggregate Productivity • Cross-Country Output Convergence
O57 - Comparative Studies of Countries
Martin Andersson - Lund University
John Wallis - University of Maryland
Stephen Broadberry - Oxford University
Vietnam the Phoenix of Asia? Resilience to shrinking in an emerging economy
Montserrat López-Jerez - University of Saint Andrews
Economic growth is unquestionably necessary to sustain economic development, but it is not sufficient. A growing body of literature is focusing on a key component: a country’s resilience to economic shrinkage. Vietnam has experienced sustained economic growth since 1990, with an annual GDP per capita growth rate of 5.3 per cent. But how resilient is its economy? One might argue that the lack of shrinking is due to lesser integration in the world economy, but as a major commodity exporter this could be easily disputed. This paper explores this question by analyzing the Vietnamese economy in a historical and geographical perspective. We apply Abramovitz’ social capabilities concept to identify the possible factors counteracting the economic shrinking forces, which are driving the change towards a more sustained growth pattern compared to its earlier history. The lessons drawn from the analysis of this case are arguably relevant to other developing countries.
Economic shrinking and long-term development
John Joseph Wallis - University of Maryland
Strengthening resilience to economic shrinking in Colombia
Tobias Axelsson - Department of Economic History, Lund University
Andrés Palacio - Department of Economic History, Lund University
Structural Change and Resilience to Economic Shrinking
Martin Andersson - Lund University
Igor Martins - Department of Economic History, Lund University
Juan Pablo Julía - Gothenburg University
Growth volatility and institutional constraints on private sector and civil society development in Turkey
Ayca Akarcay - Galatasaray University
Sezgin Polat - Galatasaray Unniversity
Constraints on the Executive and Tax revenues in the Long Run
Abrams Tagem - UNU-WIDER